David Miliband: A right decision, borne out of a wrong one

So, then, David Miliband – political colossus, or inconsequential footnote?  The greatest loss to British politics since the fall of Margaret Thatcher, or a failed leadership wannabe who will soon be forgotten?

There were plenty of opinions flying around this week in the wake of the South Shields MP’s shock decision to quit Parliament for a well-paid but scarcely high profile role running an international rescue charity in New York.

Predictably, it was his old mentors Tony Blair and Peter Mandelson who led the grief-fest, both expressing the hope that this would be but a temporary exile from which their protege would one day return in triumph.

Many Blairite cheerleaders in the media viewed Mr Miliband as so significant a figure that the ‘project’ would not survive his departure, though in truth it has been no more than a twitching corpse since his 2010 leadership election defeat.

The Conservative commentator Peter Oborne, writing in the Telegraph, took a rather different view of his career, however.

“Any detached judge has always been able to see that David Miliband was not front rank.  He is a hopeless public speaker and has never once expressed an original thought,” he wrote.

Oborne contrasted Mr Miliband’s “cosmic sulk” after losing the Labour leadership to his brother Ed with Denis Healey’s loyal service under Michael Foot after a similarly unexpected setback in 1980.

The difference between them, he argued, was hinterland:  Healey, who fought with distinction in the Second World War, knew that losing the leadership was a trivial matter by comparison, whereas Miliband, who has spent his entire adult life in politics, had no such perspective.

My own view for what it’s worth is that David Miliband was not a complete politician, but nevertheless still the best on offer at the time Labour was choosing a successor to Gordon Brown in 2010.

Oborne is right to point out that he certainly wasn’t in the front rank as an orator, but this didn’t prevent John Major reaching Number Ten and staying there for nearly seven years.

Where he was more lacking was in his tactical acumen – as was seen in his various hamfisted attempts to set out a distinctive New Labour policy agenda during the Gordon Brown years.

If these were covert leadership bids, they were spectacularly unsuccessful ones.  If they weren’t, he should have taken much more care to ensure they were not interpreted as such.

In his favour, he was certainly one of the brainiest people operating in public life over the past decade or so and also, it has to be said, one of the nicest.

As regular readers of this column will know, I was never a huge fan of New Labour, but with David it never spilled over into personal acrimony in the way it occasionally did with some of his North East Labour colleagues.

But it was not so much his cleverness or niceness that made him the best candidate to lead the party in 2010, it was simply that he was the party’s most popular and well-known figure among the wider public.

It may seem obvious that a party wanting to return to power at the earliest opportunity should take note of what the public thinks when choosing a leader, but actually they seldom do, as both Mr Healey and later Ken Clarke also found to their cost.

In the end, it is this very popularity that has forced Mr Miliband to the point where he now feels Labour’s chances of winning the next election would be better if he were 3,000 miles away from Westminster.

It was this, coupled with the peculiar dynamics of Labour’s electoral college which showed he was also the most popular choice of Labour activists and MPs, which would always prompt those comparisons with his brother’s performance.

Has he taken the right decision?  For himself, for his brother, and for the Labour Party, almost certainly yes.

But that still doesn’t alter the fact that the Labour Party made the wrong one when it decided to pass him over.

The day Mandy was 'rude' to Rebekah Brooks

I thought this epic clip from the 2009 Labour Party Conference perhaps deserved another outing in the light of current events....

The encounter happened the morning after the Rupert Murdoch-owned Sun newspaper announced it was switching its support to the Tories on the night of Gordon Brown's pre-election conference speech.

In what was surely one of Cathy Newman's finest TV moments, Mandelson denied using a four-letter word to the News International chief executive Rebekah Brooks.

I bet he wishes he had now....

Peter self-destructs for the final time

Asked once how he would know his transformation of the Labour Party would be complete, Tony Blair famously replied: "When it learns to love Peter Mandelson."

Judged purely on that measure, however, it seems from this week's events that the party which Mr Blair led for 13 years still has a way to go.

There was a point, 18 months or so ago, when it looked as though the former Hartlepool MP had finally managed to win his way into the hearts, as well as the minds, of the party faithful.

But all the goodwill engendered by his return from Brussels to stand at Gordon Brown's side during his government's most difficult days has been dissipated at a stroke by his decision to publish a trashy account of the New Labour years.

In the past, many Labour people who found Lord Mandelson's style of politics distasteful have nevertheless forgiven him on the grounds that he was a loyal party man with Labour literally running through his veins.

But the publication of his book 'The Third Man' this week has surely demolished that defence once and for all.

It has oft been said of Peter Mandelson that he was always better at guiding the fortunes of the party and its leaders than he ever was at managing his own career.

But the lack of judgment that resulted in at least one of his two Cabinet resignations seems to have returned with a vengeance in his apparent eagerness to cash in on the lucrative summer 'beach read' market.

It is not even as if any of the revelations in the wretched book tell us much that we didn't know already.

Much of the focus of attention has inevitably been on whether or not Tony Blair called Gordon Brown "mad, bad and dangerous" and likened him to a "Mafia don."

Well, "mad" is one of those words that gets thrown around a little too loosely these days. It can mean anything from clinical insanity to having a bit of a temper on you.

It is hardly surprising, though, that Labour's opponents in the media have put the worst possible construction on it, with Mr Brown's reputation taking a further battering as a result.

But in my view, the book is far more damaging to Mr Blair's historical reputation than to his successor's.

It confirms what many have long suspected, namely that he did indeed promise Mr Brown in 2003 that he would not fight a third general election, but went back on it.

It is impossible to over-estimate the impact of this on subsequent Labour history. Had Mr Brown been Labour leader up against Michael Howard in 2005, he would have won that election with at least as good a majority as Mr Blair managed.

He would then, in all likelihood, have retired with dignity mid-way through the last Parliament, giving Labour a chance to renew itself in office under a new generation.

As it is, Mr Brown is currently being subjected to all sorts of indignities, with his government's record being trashed by the Con-Lib coalition on an almost daily basis.

But I wonder whether when people realise what the coalition is really doing to our public services – privatising the NHS by the back door being its latest wheeze – they might start to feel some sympathy for the former Prime Minister.

Either way, the Labour Party will doubtless in time come to love Gordon in the way it does all its old leaders – particularly the unsuccessful ones.

One thing it will never now do, though, is to learn to love Peter.

Miliband rises as Griffin bombs

All the media attention this week was on Nick Griffin and the BNP. But meanwhile, some possibly more significant developments have been taking place behind the scenes in the Labour Party. Here's today's Journal column.

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There is a widely-held maxim in our profession that all publicity is good publicity. But after Thursday night's Question Time on the BBC, I wonder if Nick Griffin would necessarily agree.

In the run-up to the programme, there were widespread fears that the British National Party leader's appearance would somehow give the far-right group the mainstream political respectability it craves.

Critics of the BBC's decision to allow him to appear cited the upsurge in support for Jean-Marie Le Pen's neo-fascist National Front party in France in 1984, following a high-profile television performance.

But in the event, those who were worried on this score need not have feared. Far from giving his party added credibility, Mr Griffin's appearance on the programme merely confirmed that neither he nor his party are serious political players.

If Mr Griffin was the political genius that his admirers - as well as some of his opponents - clearly believe him to be, then maybe they would have had a point.

But Mr Griffin is no Jean-Marie Le Pen, still less an Enoch Powell, and my overwhelming impression from watching the programme was to wonder why anyone would want to vote for this clown.

Grinning your way through a YouTube video about MPs' expenses as Prime Minister Gordon Brown did earlier this year is one thing. Grinning your way through a question about whether or not you denied the Holocaust is quite another.

For my part, I cannot disagree with Justice Secretary Jack Straw's verdict, that far from providing the BNP with a platform for a political "breakthrough," the whole episode has been a catastrophe for the party.

Meanwhile, back in the real world of serious politics....strange things seem to be stirring in the Labour undergrowth.

Today sees the return to the region of the one-time Hartlepool MP Peter Mandelson to deliver the annual South Shields Lecture in the constituency of Foreign Secretary and potential Labour leadership contender David Miliband.

The confluence of these two leading Blairites in the region at the same time has led to excitable talk that Lord Mandy may be preparing to throw over poor Mr Brown in favour of the perennial young pretender.

While this may be a case of putting two and two together and making 17, there is a certain political logic to some of the speculation, in that most Labour MPs now believe the Prime Minister to be incapable of leading them to victory next May.

But as Mr Brown's fortunes have continued to decline, Miliband Senior seems to have overcome the political banana-skins that afflicted him during 2008 to become, once more, the flavour of the month.

As I noted a few weeks back, his cause has probably been helped by the fact that his chief rival, Home Secretary Alan Johnson, has now said he's not up to the job of PM so many times that most of the party agrees with him.

As well as resuming his front-runner status for the Labour leadership, Mr Miliband is also being spoken of as a contender for the post of EU foreign minister or "high representative," due to be created once the Lisbon Treaty is ratified.

Mr Miliband used Twitter to deny the rumour yesterday, but some insist he'd be happier in that role than in No 10, and that it's actually younger brother Ed who is Mandy's chosen one.

I wrote several months ago now that I did not believe Mr Brown would lead Labour into the General Election if it became clear that the only consequence of that would be a catastrophic defeat.

The recent drip-drip-drip of information about the Prime Minister’s health, some of it emanating from within Downing Street itself, seems to confirm that an exit strategy is being carefully devised.

At the moment, I suspect Mr Brown is keeping his options open in the hope that something will turn up, but yesterday’s news that the country is still in recession will hardly have lightened his mood.

One slogan heard doing the rounds this week was “New Year, New Leader” – and once again, the name of Miliband seems to be in the frame.

The c-word is not enough

Gordon Brown's use of the "c-word" this week was designed to clear the air over spending - but Labour's problems as it approaches the next election go deeper. Here's today's Journal column.

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Over the course of the last three general elections, British politics has followed a fairly familiar pattern, with the question of who can best be trusted to run our key public services the main point at issue in each contest.

For almost all of that time, a Labour Party which promised more national resources for services such as education and health after 18 years of Tory tax-cutting and spending restraint has had things by and large all its own way.

By contrast, the Tories found themselves on the wrong side of the political tide – instinctive tax-cutters and reluctant spenders who were simply not trusted to carry out the investment in schools and hospitals which, by then, the public wanted to see.

When the history of the Blair-Brown years comes to be written, this underlying political consensus for greater public spending will be seen as the key factor underpinning Labour’s long political hegemony.

Of course, there were other reasons for Labour’s three successive victories. In 1997, the country was so heartily sick of John Major’s sleaze-ridden Tories that Labour would probably have won irrespective of its spending pledges.

The Tories then compounded their problems in both 2001 and 2005 by going into the election with the wrong leaders in William Hague and Michael Howard, when Ken Clarke would have been a much more voter-friendly choice on both occasions.

And of course, throughout this time they were up against an acknowledged master in Tony Blair who, whatever his shortcomings as a national leader, will go down in history as an election-winner par excellence.

But notwithstanding this, the essential dividing line in British politics between 1997 and 2009 remained one of Labour investment versus Tory “cuts” – although in reality that sometimes just meant the Tories were planning to spend slightly less than Labour.

For Gordon Brown, who as Chancellor oversaw the huge public spending programme, the lesson was clear. The way to win elections was to simply to highlight what local services the Tories would “cut” from Labour’s own programmes.

And who knows, it could have worked for him again, could have secured for Labour that elusive fourth term, were it not for the fact that the whole strategy was blown sky-high by the recession.

The extent of the problem really started to become clear in this year’s Budget which revealed the scale of the debt mountain facing the country in the wake of the government’s reflation measures.

Henceforth, there would be no “investment” as we have come to understand the term. There would, and could only be cuts.

This presented Mr Brown with an obvious difficulty. The Prime Minister is not known for his political agility and once he decides on a certain strategy, his usual approach, like Churchill’s, is to “keep buggering on.”

And so he did, through numerous Prime Minister’s Question Times this summer when the “Labour investment versus Tory cuts” mantra was faithfully trotted out to an increasingly weary public.

It was, unsurprisingly, Peter Mandelson who first cottoned-on to the fact that it just wasn’t working any more, and as I wrote a few weeks back, it was Mandy who began to lay the ground for a different approach, in his Newsnight interview last month.

“I fully accept that in the medium term the fiscal adjustment that we are going to have to make….will be substantial. There will be things that have to be postponed and put off, and there will probably be things that we cannot do at all,” he said at the time.

The upshot of all this repositioning was this week’s speech to the TUC Conference by Mr Brown in which he finally conceded, for the first time, that Labour too will oversee spending cuts if, against all odds, the party still manages to win next year.

To give Gordon his due, he didn’t just whisper the dreaded c-word. In fact he used it four times for good measure.

“We will cut costs, cut inefficiencies, cut unnecessary programmes, and cut lower priority budgets,” he told the conference.

Labour’s spinners say the speech was designed to “clear the air and enable Labour’s message to be heard again.” Whether or not it will achieve that end remains very much an open question.

As it is, the dividing lines between the two main parties, at least on the issue of public spending, now seem very blurred.

The argument between Mr Brown and Tory leader David Cameron would appear to revolve around the question of whether the cuts should happen now, as the Tories are advocating , or later, so as not to damage the recovery as Labour is arguing.

But of course, by the time the election actually comes round next spring, this distinction will have all but disappeared, and we will be in a scenario where cutbacks will swiftly follow whoever wins.

Lord Mandelson, with his customary indefatigability, is trying to draw a distinction between a Labour Party that will cut spending reluctantly and a Tory Party that will do it with relish, but it is doubtful how much traction this has with the public.

The real difficulty for Messrs Brown and Mandelson is that the next election is looking increasingly likely to be fought on what is natural Tory territory.

Thanks to the downturn, the consensus in favour of increased investment in public services which has been the foundation of Labour’s success over the past decade has finally started to shift.

What the public now wants and expects is, first and foremost, a government that will get the public finances in some sort of order, even if it means cutting spending programmes.

And if the prevailing public view is that spending has to be reduced, the hard truth for Labour is that the Tories are, by temperament and history, the party best-placed to do it.

Toxic Tories rain on Cameron's parade

David Cameron and George Osborne want us to think the Tories are the "new progressives" of British politics - but they can't stop reminders of the party's 'nasty' past from reappearing. Here's today's final Journal column before my summer break.

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A few years ago, I posed the question as to whether voters of a leftish inclination would be better off with a Conservative party that sought to appeal to them, than with a Labour party seemingly only interested in pleasing those of a right-wing persuasion.

The conundrum arose as a direct consequence of David Cameron’s mission to “detoxify” the Tory brand following his election as Tory leader in autumn 2005.

For Mr Cameron, it meant focusing his energies on winning over left-of-centre voters concerned about public services and the environment, at a time when Labour’s Tony Blair continued to be more anxious about keeping traditional Conservative supporters on side.

Since Mr Blair moved on, Labour has thankfully stopped defining itself in opposition to its core voters, but as Shadow Chancellor George Osborne showed this week, the Tories remain as keen as ever to try on their opponent’s clothes.

The point was certainly not lost on stand-in premier Lord Mandelson, who in a masterly performance on Radio Four’s Today Programme on Wednesday, managed to dodge questions about his own prime ministerial ambitions by putting the boot into Ms Osborne at every opportunity.

“I think my old friend George Osborne is involved in a bit of political cross-dressing and I don’t think it’s going to fool anyone,” he said.

That “my old friend” was a reference to the fact these two have previous form. Nearly a year ago, each was accusing the other of trying to procure a donation to their respective party’s funds from the Russian oligarch Oleg Deripaska.

After briefly looking like he may have to resign from the Cabinet for a third time over a sleaze-related issue, Lord Mandelson decisively won that battle with a counter-attack that came close to ending Mr Osborne’s own frontbench career.

But putting personal rivalries to one side, what was really interesting about Mr Osborne’s audacious “we are the progressives” speech this week was what it told us about the underlying political consensus in the country.

And this, in turn, is perhaps the one thing that can still give Labour grounds for hope as it approaches the coming election battle.

Throughout all the troubles and travails of Mr Brown’s premiership over the past two years, the Prime Minister and his supporters have continued to clutch at a single straw – the fact that even though his government is wildly unpopular, there has been no fundamental shift in the climate of public opinion towards the Tories.

Mr Osborne’s speech this week proves the point. Rather than make the case for “conservative” values as Mrs Thatcher might have done, the Tories still feel the need to fight on what is essentially Labour ground.

As it is, Mr Osborne’s speech on Tuesday demonstrated the extent to which the word “progressive” has lost virtually all meaning in contemporary political debate.

It used to denote a form of taxation which sought to redistribute resources from the better-off to the worst-off, but since all parties subscribe to this to a greater or lesser extent, this definition does not help us much.

The central claim of Mr Osborne’s speech was that Labour’s “opposition to meaningful public service reform” meant it had “abandoned the field of progressive politics.”

While the Shadow Chancellor seems to be using “progressive” here to mean “reforming,” most Labour supporters would argue that a reform is only “progressive” if it actually helps the worst-off.

But this is more than just an arid debate about labels. The nature of Lord Mandelson’s response to Mr Osborne would suggest that Labour too believes “progressive” is a word worth fighting over.

And of course, Lord M. is quite right to point out that, in terms of its effect on the worst-off, the Tories plans for £5bn of public spending cuts would hardly be “progressive” in their human consequences.

The difficulty for Labour, as I pointed out a few weeks back, is that no-one now seriously believes that they won’t also be forced to make cuts of similar magnitude.

Maybe the argument, in the end, will come down to which of the two parties can convince the public they are wielding the axe with the greater reluctance.

Part of Mr Cameron’s problem, though, as he continues to try to persuade the public that the Tories have changed, is that old reminders keep popping up of their ‘nasty party’ past.

We already knew what Shadow Commons Leader Alan Duncan really thought about MPs’ expenses from his performance on Have I Got News For You a few weeks before this summer’s scandal broke.

“It’s a great system, isn’t it?” the one-time property millionaire told Ian Hislop as he struggled to contain the smug grin spreading across his face.

Mr Duncan claimed at the time that he had been joking – but the fact that he was later captured on film whingeing about MPs having to live on “rations” does rather give the game away.

Potentially even more damaging for Mr Cameron, though, were the comments by the prominent Tory MEP Daniel Hannan about the National Health Service.

Interviewed on US television, Mr Hannan backed Republican critics of President Obama’s plan for universal healthcare by saying he "wouldn't wish the NHS on anyone."

As Labour’s big hitters queued up to twist the knife yesterday, Mr Cameron was himself forced to take to the airwaves in a frantic bid to reassure the public once again that the NHS is safe in Tory hands.

Some are already seeing a Tory victory next year as a done deal - but episodes such as this show that Mr Cameron’s big rebranding exercise still has a way to run.

Johnson lies low as Hatty and Mandy slug it out

Is the Home Secretary the big winner after two weeks of "grandstanding" by Harman and Mandelson? Here's today's Journal column

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Last week, in the course of describing Peter Mandelson’s assumption of the reins of power in Whitehall, I made passing reference to talk of the former Hartlepool MP becoming Britain’s next Prime Minister.

At the time, the spate of “PM4PM” rumours doing the rounds struck me as no more than silly season tittle-tattle, and to be fair, the Business Secretary himself seemed keen to play them down.

But silly season or no, over the past seven days the story has both acquired ‘legs’ – as they say in the trade – and a fresh North-East dimension to boot.

According to at least two Sunday newspapers, a serious plot to install Lord Mandelson as Gordon Brown’s successor is already under way, with former Chief Whip Hilary Armstrong said to be playing a key role.

The plan, or so we are asked to believe, is for a leading Blairite Cabinet minister to stage what is being termed a “nuclear resignation” in the middle of Labour’s conference this autumn which would force Mr Brown out within hours.

Lord Mandelson would then take advantage of a new measure which became law this summer to allow life peers as well as hereditary peers to disclaim their titles.

At this point, Ms Armstrong, who has already announced she is standing down as MP for Durham North-West at the next election, would vacate her safe seat, allowing Mr Mandelson – as he would now be called - to stand in a by-election.

The one-time Prince of Darkness would then be duly returned to the Commons in good time to be installed as Labour leader and Prime Minister by Christmas.

Fanciful? Well, the fact that Peter Mandelson has even managed to get people talking about the idea of him as Prime Minister is surely proof that, in politics, nothing can ever be ruled out.

As the humourist and commentator Matthew Norman put it: “Even by the standards of Bob Monkhouse Syndrome, whereby the most reviled national characters inevitably come into vogue if they hang around long enough, this is some transformation.”

Either way, one politician who will have been looking somewhat askance at all this Mandy-mania is Harriet Harman, Labour’s nominal Number Two and Mr Brown’s official holiday stand-in.

She once again left us in no doubt this week that, if there were to be a vacancy at the top of the Labour Party in the near future, her hat remains very firmly in the ring.

First came her assertion that the party should never again be led by an all-male leadership team, on the grounds that men “cannot be left to run things on their own.”

Allied to this was the suggestion that men were effectively to blame for the recesssion, and that if Lehman Brothers had been Lehman Sisters we would not be in the mess we are in now.

There followed rumours of a spat with Justice Secretary Jack Straw and Home Secretary Alan Johnson, in which Ms Harman was said to have vetoed a review of rape laws because it did not go far enough.

Solicitor-General and Redcar MP Vera Baird attempted to pour oil on these troubled waters, but Ms Harman hit back again by telling Radio 4’s Woman’s Hour she would not “tippy-toe” around issues she believes in.

For Ms Harman, it’s a dangerous game. While few doubt that playing the ‘women’s card’ has got her a long way in the Labour Party, it has not always endeared her to the wider public.

Some elements of the party have been criticised in recent years for trying to re-launch the class war, but it has seemed at times this week as if Labour’s deputy is trying to start a gender war.

And if her pro-feminist agenda sometimes plays badly with floating voters in ‘Middle England,’ neither is it always overwhelmingly popular with Labour’s own core supporters.

Many Labour activists believe that all-women shortlists, for instance, have actually harmed equal opportunities by making it harder for black and Asian men to become Labour candidates.

What should Mr Brown make of all this “grandstanding?” Maybe he’s enjoying the spectacle of leadership wannabes vying for media attention as he himself takes a much-needed break.

Maybe there’s even an element of Machiavellianism in it, the kind of divide-and-rule strategy that his predecessor sometimes employed to good effect, setting Mr Brown, Robin Cook and John Prescott against eachother.

But while Mr Brown is undoubtedly devious enough to play such a game, he is not secure enough in his own job to be relaxed about such open jockeying for power among his subordinates.

If it carries on into the autumn, it risks the conference turning into a ‘beauty contest’ between the would-be successors, rather than the launch-pad for what would surely be the final Brown comeback bid.

But while Mandy and Harriet have been slugging it out across the airwaves and column inches over the past fortnight, one politician has been carefully staying out of the fray – Mr Johnson.

For all the bigging-up of Lord Mandelson over recent weeks, the Home Secretary is still the one the Tories most fear, the man whose common touch would instantly make David Cameron look like the privileged Old Etonian he is.

Mr Johnson has spent the last few weeks quietly liberalising the Home Office and neutralising ID cards as a potential election issue – both moves which will play well with Labour MPs in any contested leadership race.

Some will see his decision to lie low as evidence that he doesn’t really want the top job. But in so doing, perhaps he is showing the political astuteness which Harriet Harman so often lacks.

Has Bradshaw been sidelined by Mandy?

I posted this piece earlier today on HoldtheFrontPage's offsite blog The Journalism Hub but I thought I'd cross-post it here as it may have a wider political interest. It concerns the question of who is now taking overall ministerial responsibility for the government's Digital Britain proposals.

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After some confusion as to whether Sion Simon or Stephen Timms would be taking over the Digital Britain brief from the now-departed Lord Carter, Downing Street has now ruled in favour of Mr Timms.

But anyone expecting any degree of clarity from the government over which Whitehall department will be ultimately responsible for implementing the plans will have been sorely disappointed.

The story so far is that Timms will remain in his current role as financial secretary to the Treasury, but with additional ministerial responsibilties at Lord Mandelson's Department for Business, Innovation and Skills.

In terms of his Digital Britain responsibilities, he will report to the Business Secretary, rather than the Culture, Media and Sport Secretary Ben Bradshaw, whose department has hitherto led on the Digital Britain report and who personally delivered it in an oral statement to the Commmons back in June.

Meanwhile Mr Simon, as creative industries minister, is to undertake some ill-defined supporting-role in relation to those aspects of Digital Britain which are still the responsibility of the DCMS.

The upshot of all this appears to be that Mr Bradshaw, a former Exeter Express and Echo reporter who has recently made some welcome comments about the threat to regional newspapers posed by council propaganda sheets, has been well and truly sidelined.

A cynical interpretation of this would suggest that Bradshaw, who is also a former BBC reporter, was deemed insufficiently impartial to rule on the vexed issue of whether the BBC licence fee should be top-sliced to fund new regional TV news consortia in which the local press is expected to play a part.

Either way, with so many departments and ministers now apparently involved, the words "too many cooks," "dog's breakfast" and "camel designed by committee" all spring to mind.

Mandy takes up the reins

Whoever ends up leading Labour into the election, the past seven days have shown where the power really now lies. Here's today's Journal column.

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Traditionally, the time of the year between the start of the MPs long summer recess in July and the build-up to the party conferences in September has been known as the political ‘silly season.’

In most years, an uneasy peace descends over Westminster, and political journalists are reduced to writing about such ephemera as John Prescott finding a baby crab in the Thames and naming it after Peter Mandelson.

But with an election less than a year away and Gordon Brown’s government still mired in difficulties at home and abroad, nobody expected this to be one of those summers when politics effectively goes into abeyance.

And something else has changed too since Mr Prescott observed that tiny crustacean in 1997. From being the butt of Old Labour humour, Lord Mandelson of Foy and Hartlepool is now seen by most of the party as vital to its slim hopes of election victory.

In one sense, it’s a fulfilment of former Prime Minister Tony Blair’s more controversial pronouncements.

Asked once how he would know when his mission to transform his party had been completed, he replied: “When the party learns to love Peter Mandelson.”

With Mr Brown off on his holidays this week – in so far as the workaholic PM is ever off-duty – the former Hartlepool MP has been large and in charge around both Whitehall and the TV studios alike.

In so doing, he demonstrated beyond any remaining doubt that he has now inherited the mantle of his one-time tormentor Mr Prescott, as Deputy Prime Minister in all but name.

Lord Mandelson is sensibly playing down excitable talk that he could actually become the next Labour leader, although one influential backbencher declared this week that he was the only person who could beat the Tories.

There has not been a Prime Minister in the House of Lords since Lord Salisbury in 1902, and to have one in 2009 would be extraordinary even by the standards of Lord Mandelson’s topsy-turvy career.

Nevertheless, one had the unmistakeable sense this week that this was a moment he had been looking forward to for a long time, such was the relish with which he took up the levers of power.

His aim was nothing less than to set a new strategic course for Labour as it approaches an election that almost everyone now expects it to lose, and lose badly.

Such pessimism about the party’s prospects is hardly surprising given its dire performance in the Norwich North by-election ten days ago, a result which if replicated across the UK would give David Cameron a majority of 240.

So far, it has not led to a renewed bout of speculation about Mr Brown’s leadership, but it has brought about a growing realisation that he has lost the argument over “Labour investment versus Tory cuts.”

This tired old mantra has been central to Mr Brown’s re-election strategy, but has failed to gain any traction with a cynical public that believes spending cuts will follow whoever wins in 2010.

What Norwich North did was to present an opportunity to those Cabinet members who want to move away from a strategy which they think the public now regards as fundamentally dishonest.

Hence the new note of candour in Lord Mandelson’s interview with BBC Newsnight this week when, without actually using the c-word, he accepted that cuts would indeed be part and parcel of a Labour fourth term.

“I fully accept that in the medium term the fiscal adjustment that we are going to have to make….will be substantial. There will be things that have to be postponed and put off, and there will probably be things that we cannot do at all,” he said.

It wasn’t the only change in election strategy Lord Mandelson announced this week. He also appeared to commit Mr Brown to a televised debate with Mr Cameron, despite Downing Street’s insistence that the Prime Minister remains opposed to the idea.

“I think television debates would help engage the public, help answer some of the questions at the heart of the election, help bring the election alive in some way,” he said.

For what it’s worth, my guess is that it still won’t happen, for the simple reason that electoral law obliges the big broadcasters to give the Liberal Democrats almost equal airtime to that of the Labour and Conservative parties.

This will mean that Nick Clegg will have to be included in any head-to-head between the party leaders, something the other two might be keen to avoid.

But that is by-the-by. The real significance of Lord Mandelson’s comments this week is that he now feels in a strong enough position to set out his own agenda without clearing it with Number Ten.

Some could even see it as the beginnings of an attempt to distance himself from Mr Brown and prepare the way for a new leader with a new, more open style.

After the failed “coup” in May I predicted that Mr Brown would, at some stage, come under fresh pressure to stand down in favour of Home Secretary Alan Johnson, and nothing that has happened since has caused me to revise that view.

Mr Brown’s position remains weak. Labour MPs who effectively put him on probation in May spoke then of the need for a demonstrable improvement in Labour’s performance by the autumn, but there is absolutely no sign of this happening.

But whatever internal machinations occur in the run-up to the conference season – and my guess is that there will be plenty – one thing is becoming increasingly clear.

It is that whether it is Mr Brown or Mr Johnson who leads Labour into the next election, it will be Lord Mandelson who is once more pulling the strings.

PM for PM

More on Mandy's assumption of power in my weekly column tomorrow.....

"And a portion of your very excellent guacamole, please"

Those were the immortal words which were memorably not spoken by Peter Mandelson during a campaign visit to a Hartlepool fish and chip shop shortly after his adoption as the Labour candidate there in the mid-1990s. But, of course, they ought to have been. Indeed, never did an apocryphal political tale more deserve to be true than in this case.

So was it really green custard which the airport protesters threw at him today, or was it the guacomole coming back to haunt him again? Or could it, just simply, have been a punnet of mushy peas?

Could Mandy spin us into the Euro?

Well after all, who would have thought NuLab would have nationalised the banks? Here's today's Journal column.

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Ever since Gordon Brown stunned the political world this autumn by bringing back Peter Mandelson into his Cabinet, there has been a general sense that things have changed at the top of the government.

An administration which had become a by-word for drift, purposelessness and lack of vision seems to have latterly acquired a new strategic focus and direction.

Sure, much of it can simply be put down to events, and in particular the need for Mr Brown and Chancellor Alistair Darling to mount an effective policy response to the challenge of the economic downturn.

But there are many who nevertheless believe that it is the political genius of the former Hartlepool MP which has really been behind the revival in the government’s fortunes over the past three months.

One aspect of politics that has noticeably changed, for instance, is that the Tories are no longer having things all their own way in terms of national media coverage.

Shadow Chancellor George Osborne has been a particular target in what has all the makings of a Mandelson-inspired operation to undermine his standing with the electorate.

It was also Lord Mandelson who turned the fire on the Tories over the Damian Green affair, hinting that his Home Office “mole” was not necessarily acting out of the purest motives.

It has prompted some commentators to speculate that Mandy has effectively stepped into the role that has been vacant since the departure of John Prescott – that of Deputy Prime Minister.

Indeed one national newspaper writer, the Telegraph’s David Hughes, went even further, claiming this week that Lord Mandelson was now running the country.

“While Gordon Brown spends his days masterminding the economic rescue of the entire planet, the everyday business of government seems to have been devolved to Lord Mandelson,” he wrote.

“Virtually everything the Government does - and it is being hyper-active at the moment - has his fingerprints on it.”

Hughes cited last week’s two-year mortgage holiday for middle-earners who lose their jobs as a classic bit of Mandelsonian positioning, letting Middle Britain know that Labour hasn't forgotten about them.

Others have even credited Lord Mandelson with bringing about the recent improvement in the Prime Minister’s general mood.

For those who view politics as essentially a psycho-drama, and the story of New Labour as an eternal triangle involving its three prime movers, there is probably something in this.

On this view of history, Gordon and Peter were best friends, until Peter decided to become Tony’s best friend. But when Tony finally left to travel the world and make lots of money, Peter and Gordon were free to make up again.

Those who have called Mandelson the Prime Minister’s “NBF” – New Best Friend – are missing the point. In fact he is Mr Brown’s Old Best Friend - and there’s nothing like having your old friends around when the chips are down.

But whatever impact Peter Mandelson has had on the government’s performance since his return, it could turn out to be a case of “you ain’t seen nothing yet.”

For the man who spun Labour back into power in the 1990s may yet be dreaming of one last political triumph to top them all – to spin Britain into the European single currency.

Even three months ago, the very idea would have seemed absurd, but the plummeting pound and the deepening recession have at last seen the debate starting to move in the direction of the euro-enthusiasts.

The question is: could the downturn finally bring about the economic conditions for British entry, and if so, would political attitudes start to change as a result?

Already, no less a figure than European Commission President Jose Manuel Barroso has claimed that “significant people” in the UK are talking about abandoning the pound.

Lord Mandelson, his former Commission colleague, was obliged to deny he was one of them – but the way he did so was, in my view, highly revealing.

His exact words were: "My view is that the Government is right to maintain the long-term policy objective of taking Britain into the euro, but it is not for now.”

Well, joining the euro may indeed be “a long-term policy objective” but then so is a referendum on proportional representation, and neither have been openly talked about by Labour for years.

For about a decade after the signing of the Maastricht Treaty in 1992, the debate over the single currency dominated British politics.

It was largely responsible for the internecine warfare which came close to destroying the Tory Party as a political force and also ensured they were landed with a succession of unelectable leaders.

Between them, David Cameron and Mr Brown had manage to kick the issue into the long grass, but thanks to the credit crunch, it’s now back on the agenda.

Not only does Mr Brown have the chance to resurrect all those old Tory splits, he may even conceivably get the opportunity to do what his predecessor failed to do, and settle Britain’s “European destiny.”

So could it really happen? Could there be a referendum on the euro in this Parliament? And could the public even be persuaded to vote yes?

Well, it would certainly require a dramatic shift in public opinion, but the lesson of the past year in politics is that changes in economic circumstances can bring about such shifts.

If had wrote in my annual Preview of the Year last January that New Labour would end up nationalising two major High Street banks, most of you would have thought I was off my rocker.

Yet it happened – and the one certainty in politics over the next 12 months is that we should expect the unexpected

Mandelson should answer Commons Questions

So says the Business and Enterprise Select Committee whose job is to monitor the activities of Lord Mandy's new department. But not just him. In my view, anyone should be able to be quizzed on the floor of the Commons, whether they are a member of either House of Parliament.

Here's what I wrote on the Guardian Politics Blog earlier today:

In my view we should go further, and make it possible for people to answer questions in the Commons without needing to be a member of either House of Parliament. This would achieve two things. Firstly, it would enable Prime Ministers to appoint the very best people to their Cabinets without them needing to become MPs or peers. Secondly, it would move us closer to the classic Separation of Powers doctrine on which the US constitution is built. The Prime Minister would continue to be the person who can command a majority in the House of Commons, and would thus invariably be an MP. But he would be able to appoint anyone he liked to his Cabinet in the knowledge that they remained accountable to Parliament through parliamentary questions and (more powerful) select committees.

To see the whole discussion in context, see Andrew Sparrow's original blogpost here.

Two cheers for pirouetting Purnell

The government was as all over the place over the post office contract as it was over Baby P - but at least they got there in the end. Here's today's Journal column.

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It is easy to become cynical about politicians, especially when you've been following their activities for as long as I have. But just occasionally, they can surprise us all and do something right.

It is true they hardly covered themselves with glory this week over the Baby P tragedy, although I'm not sure which of Gordon Brown or David Cameron was more culpable in that regard.

The Tories have spent most of the week trying to blame Mr Brown for allegedly trying to turn the case into a "party political issue," with the implicit suggestion that he doesn't care about the dead child.

For my part, I think if Mr Cameron was so keen to take a non-partisan approach to the issue, he could have chosen a less highly-charged arena in which to raise it than Prime Minister's Questions.

But to be fair to our Westminster masters, they partially redeemed themselves with the announcement of a lifeline to 3,000 post offices under threat of closure, on top of the 2,500 which are already due to close by the end of the year.

For some years, it has been apparent that wherever this government's priorities lay, they certainly did not lie with preserving essential services to isolated or rural communities.

I could list numerous examples of this from the gradual demise of village schools to the trend towards distant super-hospitals, but its apparent willingness to allow village post offices to go to the wall is perhaps the most emblematic.

Which is why Work and Pensions Secretary James Purnell's decision on Thursday was as unexpected as it was welcome.

Ministers have decided that the £200m-a-year contract to handle benefit and pension payments - known as the Post Office Card Account - will not after all be handed over to a private sector provider.

Instead, the Post Office will continue to run the card account which distributes benefits to 4.3 million claimants.

Mr Purnell told MPs he would do "nothing to put the network at risk" and that the contract was "central to the viability of the network."

It guarantees the contract until at least March 2015 with what Mr Purnell called "the possibility of an extension beyond that".

Perhaps one of the reasons the announcement caught my eye was because, a few months back, I wrote in this column that "real Labour governments don't close local post offices."

In the light of this, it would be nice to view the decision as further evidence that Mr Brown's administration is rediscovering some sense of moral purpose, though the truth may be more prosaic.

Almost certainly, it had more to do with the impact of the financial crisis and the need to ensure that the people's money is handled by a trusted organisation.

Mr Purnell himself hinted at this in his statement, saying: "The circumstances have changed because of the current financial situation. It means that people are even more reliant on the Post Office than before."

The Tories are certainly in no doubt. Shadow Business Secretary Alan Duncan called the contract announcement "a humiliating climbdown for the government, who have done everything they possibly can to find a way of awarding it to somebody else."

There is possibly something in that, given Mr Purnell's own performance in a Lib Dem-inspired Commons debate last Monday.

The Work and Pensions Secretary insisted there would be "due process" in relation to the award of the contract, and Labour MPs duly trooped through the lobbies to defeat a Lib Dem call for the tendering process to be abandoned.

Yet 72 hours later he was back in the Commons announcing that he done precisely that, prompting one commentator to call it the "Purnell Pirouette."

If the truth be told, the government has been a bit all over the place on the issue

It was a not dissimilar story with Baby P, with the initial refusal to hold an inquiry into Haringey Council's handling of the case swiftly reversed by Children's Secretary Ed Balls.

All in all, it is hard to disagree with the verdict of the Lib Dems' work and pensions spokeswoman Jenny Willott.

"This could all have been avoided if, as the Liberal Democrats have long argued, the Post Office Card Account had never been put out to tender in the first place," she said.

But if the U-turn was, in any sense, a nod to traditional Labour values, it was ironic to see former Hartlepool MP Peter Mandelson taking a key hand in it.

He of course is the man who has been most closely associated with trying to get the Labour Party to behave more like the Tories in their general attitude to the private sector.

Yet Mr Mandelson - or someone acting on his behalf - had clearly briefed the Sunday papers last weekend that there might be some good news in the offing for the Post Office this week.

The Prince of Darkness has certainly not lost his eye for a good headline in his time away from UK domestic politics.

But in the final analysis, the point is that no matter how we got here, the right result has, for once, been achieved.

People in rural Northumberland whose post offices may now remain open where once they faced closure will not worry too much about the motives behind the government’s change of heart.

Whether it was a case of principle or pragmatism, what's important is that a vital social service is now set to be preserved, at least in some areas.

Surely our political leaders deserve at least two cheers for that?

Prince of Darkness continues to weave his spell

Apologies for lack of blogging this week - a combination of illness and extreme busy-ness - but here's my weekly Journal column, focusing inevitably on the so-called Corfu capers.

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It is no exaggeration to say that, of all the men and women who have influenced the course of political events over the past 16 months of the Brown premiership, the one who had possibly the greatest impact was Shadow Chancellor George Osborne.

It was his audacious plan to slash Inheritance Tax for all but the very-super-rich unveiled in his 2007 conference speech that, more than any other single factor, persuaded Mr Brown not to call a general election that autumn.

Many thought it finally marked the 36-year-old Mr Osborne’s arrival as a genuine player in the front rank of politics - a “Big Beast” in the old Tory parlance.

But if so, the events of the past week have reopened some of the old doubts in the party about whether Mr Osborne’s exalted position in the Tory hierarchy is a case of too much, too young.

The tale of the "Corfu Capers" is an intriguing demonstration of how high society and its tangled network of relationships can impact on day-to-day political events.

It all began when former Hartlepool MP Peter Mandelson, then a European Commissioner, made some critical comments about Mr Brown to Mr Osborne while they were both staying at the Greek villa of their mutual friend, Nathaniel Rothschild, this summer.

When a few weeks later Mr Brown made the dramatic step of restoring the newly-ennobled Lord Mandelson to his Cabinet in his reshuffle, what had been merely a juicy piece of gossip became political gold-dust.

A story duly appeared in The Sunday Times in which it was claimed that the new Business Secretary had “dripped pure poison into the ears of a senior Tory” about the Prime Minister during the holiday.

Mr Rothschild was furious at what he saw a breach of confidence, and got his own back by deciding to reveal what else Mr Osborne had got up to on his holidays.

Specifically, he claimed that Mr Osborne and the Tory chief executive Andrew Feldman had tried to solicit a £50,000 donation to Tory funds from a Russian oligarch, Oleg Deripaska, while visiting his yacht.

Mr Osborne has denied this, but "friends" of Mr Rothschild has now made clear that if he continues to query his version of events, he will destroy him, suggesting he has written witness statements from others who were present.

There is no suggestion that it was Lord Mandelson who tried to persuade Mr Rothschild to exact revenge on Mr Osborne.

It seems the merchant banker was simply so enraged by the breach of confidence that he decided to administer what one close associate called a "slap on the wrist."

However Tory leader David Cameron's office was warned following the Sunday Times' story that the Business Secretary knew something "explosive" about Mr Osborne and that the Shadow Chancellor should "be careful."

Mr Osborne has been forced to learn two hard lessons. First, you don’t breach confidences. Second, you don’t mess with Mandelson.

It seems unlikely as yet that the Shadow Chancellor will have to resign, and even though Mr Brown has said he hopes "the authorities" will investigate, it is not entirely clear whether any actual offence has been committed.

But it does focus attention on the Tories' readiness for government and specifically on whether they have yet got the make-up of their senior team quite right.

Already this question has been thrown into relief by Mr Cameron's failure to restore David Davis to the Shadow Home Secretaryship even though his successor Dominic Grieve seems ill-fitted for such a cut-and-thrust role.

Now the focus is on Mr Osborne - and whether someone who looks and sounds a bit less like a merchant banker might be a more convincing advocate for the Tories in the midst of the current crisis.

There has been persistent talk in Tory circles that if he wins the next election, Mr Cameron intends to bring Ken Clarke into a front-line role in government, possibly as Leader of the Commons.

But if he really does intend to employ the 68-year-old bruiser's considerable talents, he should not waste time hanging around for polling day.

He should bring Mr Clarke in now - preferably as Shadow Chancellor so he can deploy all his Treasury experience against Labour as the economic crisis continues to unwind.

Mr Clarke has long harboured a grudge against Mr Brown for the way he failed to give the Tories any credit for stabilising the economy between 1993 and 1997. What better way to get his own back.

The Corfu affair also focuses attention once again on the whole issue of political donations, demonstrating that no party is immune from the problem.

Last year we were all agog over whether Newcastle businessman David Abrahams had channelled donations to the Labour Party through associates in the city. Now the spotlight is once again back on the Tories.

What it shows is that attempting to rid British politics of sleaze is a bit like trying to abolish sin

Unless and until we move a situation where political parties are state-funded, these sorts of controversies will surely continue to recur.

For me, though, what has really elevated this story beyond the realms of run-of-the-mill political tit-for-tat has been the involvement - however innocent - of Lord Mandelson.

It has been yet another fascinating example of the Prince of Darkness's almost unique capacity for causing mayhem, even if it is sometimes inadvertent.

We saw this in his Cabinet career with his two resignations. We have seen it in the way he can both electrify and terrify the political establishment in almost equal measure.

Three weeks into his third Cabinet comeback, the man once known as the Prince of Darkness has certainly not lost his lethal touch.